Correlation Between Mapfre and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Mapfre and Naturhouse Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mapfre and Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre and Naturhouse Health SA, you can compare the effects of market volatilities on Mapfre and Naturhouse Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mapfre with a short position of Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Naturhouse Health.
Diversification Opportunities for Mapfre and Naturhouse Health
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mapfre and Naturhouse is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health and Mapfre is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mapfre are associated (or correlated) with Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Mapfre i.e., Mapfre and Naturhouse Health go up and down completely randomly.
Pair Corralation between Mapfre and Naturhouse Health
Assuming the 90 days trading horizon Mapfre is expected to generate 0.6 times more return on investment than Naturhouse Health. However, Mapfre is 1.66 times less risky than Naturhouse Health. It trades about 0.09 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.02 per unit of risk. If you would invest 174.00 in Mapfre on August 31, 2024 and sell it today you would earn a total of 72.00 from holding Mapfre or generate 41.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Mapfre vs. Naturhouse Health SA
Performance |
| Timeline |
| Mapfre |
| Naturhouse Health |
Mapfre and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre and Naturhouse Health
The main advantage of trading using opposite Mapfre and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre position performs unexpectedly, Naturhouse Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.The idea behind Mapfre and Naturhouse Health SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Naturhouse Health vs. Caixabank SA | Naturhouse Health vs. Azaria Rental SOCIMI | Naturhouse Health vs. Labiana Health SA | Naturhouse Health vs. Inhome Prime Properties |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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